Domestic gas price to be adjusted: VP

Vice President Boediono said Tuesday that the domestic gas price, currently low compared to international prices, would be gradually adjusted to its true economic value so that it would attract more investment.

"We need a pricing policy that will remain siding with the domestic industry, power generation, transportation and household needs," Boediono said when opening an oil and gas conference organized by the Indonesian Petroleum Association.

Currently, domestic gas prices stand at around US$2 to $3 per million British thermal unit (mmbtu), as compared to the current international prices of more than $10 per mmbtu.  

Because of this big price disparity, most private gas producers export their product rather than selling it in the domestic market.

In addition to the pricing policy, Boediono said the government would encourage the development of gas infrastructure.

He promised the government would work out better incentives, regulations and better and faster bureaucratic processes to speed up investment and development in the gas industry.